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Archive for November, 2008:

The recent terrorist attacks in India should be viewed with concern in the Middle East. After the weekend’s events, its a question of when, not if India retaliates against Pakistan.

However such an attack will force Islamabad to pull its forces away from the Afghani border, thus enabling Al Qaeda to expand its operations in Afghanistan.

Furthermore, tensions between India and Pakistan will mean that Barack Obama will have to focus his efforts there, as soon as he enters office, or even before. This could reduce US involvement and focus on the Iranian nuclear program, the situation in Iraq and the Israeli Palestinian peace process. In all cases, conservative, anti-peace parties could make use of the reduced US focus to expand their activities.

There is also the economic angle. There are hundreds of thousands of Pakistanis living abroad, due to troubles at home. The new tensions could send them fleeing in larger numbers, thus putting more strain on the economies of Middle Eastern countries, especially those belonging to the Persian Gulf Cooperation Council.

Iran in particular has much to worry when it comes to its economy. It was placing much hope on the peace pipeline running through Pakistan and India. It was hoping that through the sale of gas to these two energy hungry giants, it could increase its income and political leverage in the region. With relations between India and Pakistan worsening, this now seems much less likely.

The current crisis between India and Pakistan is not just a test for Barack Obama. Its also a diplomatic challenge for the Middle East. Despite the difficulties ahead, Middle Eastern countries, especially those who have leverage over Pakistan, should try to contain the current situation by pressuring Islamabad to curb the activities of terrorists on its soil. Saudi Arabia could lead the region in this case. Having emerged as the recent rescuer of Pakistan’s financial crisis, it could use its leverage over Islamabad. After Washington, Riyadh is the second biggest door opener in corridors of power in Pakistan. This could be put into good use.

The current crisis can also be viewed as the first test for global multilateral diplomacy as a tool to resolve crisis in the post Bush era. The international community should try not to fail.

Global Trends 2025, a new report written by the US National Intelligence Council (NIC) was released on Friday 21st of November. The full version of the report makes some interesting readings about Iran. Here is an excerpt about Iran’s demographic and economic outlook:

“Two additional demographic near-certainties are apparent: first, despite low fertility, Iran’s population of 66 million will grow to around 77 million by 2025. Second, by then, a new youth bulge (an echo produced by births during the current one) will be ascending— but in this one, 15-to-24 year olds will account for just one-sixth of those in the working age group compared to one third today.

Some experts believe this echo bulge signals a resurgence of revolutionary politics.

Others speculate that, in the more educated and developed Iran of 2025, young adults will find career and consumption more attractive than extremist politics. Only one aspect of Iran’s future is sure: its society will be more demographically mature than ever before and strikingly different than its neighbors”.

“Although the rise of no other state can equalthe impact of the rise of such populous states as China and India, other countries with potentially high-performing economies—Iran, Indonesia, and Turkey, for example—could play increasingly important roles on the world stage and especially for establishing new patterns in the Muslim world”.

Analysis: This shows that Iran’s falling birthrate, from more than six children per woman in 1985 to less than two today, will reduce the burden on Iran’s economy. This will lead to more jobs being available, and less mouths to feed and to care for, by the government.

This is good news. However, I believe that lack of investment in Iran’s non oil exports, very little investment in renewable sources of energy and falling levels of investment in education will mount serious challenges, and could reduce the chances for realization of the report’s forecast about Iran.

The lack of infrastructure in renewable energy alone is one major factor. Billions will have to be spent on research and implementation of sources (eg. solar, wind), and more on changing Iran’s energy transportation infrastructure. Furthermore, with forecasts about a fall in oil income, Iran will need massive investment in its non oil sector, in industries which will provide the country with competitive advantage over its neighbours. This is not forthcoming in any meaningful manner.

16 years is not a long time in making such important changes. Unless Iran turns its economy around in the next few years and improves its relations with the West, it could in fact lose its clout in the Muslim world and in the Middle East to Persian Gulf countries, especially Saudi Arabia and Turkey. For now, I don’t see any positive signs on the horizon for Iran’s economy, or relations with the West.

“Iran has now produced roughly enough nuclear material to make, with added purification, a single atom bomb, according to nuclear experts”

And where do the experts get their information from?

“The figures detailing Iran’s progress were contained in a routine update on Wednesday from the International Atomic Energy Agency, which has been conducting inspections of the country’s main nuclear plant at Natanz. The report concluded that as of early this month, Iran had made 630 kilograms, or about 1,390 pounds, of low-enriched uranium”.

However, all hope is not lost.

First and foremost, Iran would have to further purify the fuel and turn it into a warhead design. The NYT report says that this is a

“a technical advance that Western experts are unsure Iran has yet achieved”

One must not forget that the enriched uranium is low grade. For now, it can be used for nuclear power plants. However, it can be further refined into higher grade uranium. To do that, enrichment facilities at Natanz would have to go through major visible reconfigurations. For example, all the piping infrastructure will have to be redone. This would make it very difficult for Iran to hide from the IAEA inspectors.

Unless there are secret facilities where the low enriched uranium is purified, away from the eyes and knowledge of the IAEA. And this is very possible.

So where do we go from here?

With Russia and China refusing to back further sanctions, all that remains diplomatically is for Obama to try and use direct negotiations. Unless there is a miracle and the Russians and Chinese join in, there is little else that can be done diplomatically. This is why its so important that the talks between the two sides succeed, for Israel’s sake too. A negotiated settlement would be the best solution for Jerusalem. Not only because Israel has concerns about Iran’s nuclear program. Also, because a US rapprochement with Iran in such a scenario, and the confidence building could help find a solution over disputes in Lebanon and Gaza.

If talks fail, the US could also take unilateral sanctions. The most powerful of which could be sanctions against the Iranian Central Bank (Bank Markazi). With oil prices falling, and reports that Iran will face a $60 billion budget deficit next year, this may force Ayatollah Khamenei to take negotiations seriously.

One can not also help but notice that such reports help those who want a military solution. This may not be around the corner, however, it is there. Even when Obama enters office. Many have accused the Democrats of being too timid and too compromising. Thats not true. The difference with them is that they are likely to give negotiations a serious chance, before reaching out for their guns. And if they do, they won’t do it alone. As shown in the 1999 war against Slobodan Milosevic’s Yugoslavia.

According to Jahan News, which is close to Iran’s Intelligence community, Hoessein Derakhshan, the Iranian blogger who visited Israel in 2007 from Canada, has been arrested in Tehran.

According to what the article says are “credible sources”, Hossein has admitted to spying for Israel. His confessions are said to include some “intricate” points.

Jahan news talks about Hossein’s participation in a number of conferences in Israel. It says that Haaretz news paper described him as a friend of Israel. It then quotes Jerusalem Post and Haaretz as saying that Hossein had described Israel as a model of democracy, and that the Israeli and Turkish system of governance, and participation of religion in government was a good model for Iran.

It then goes on to say that Hossein had a picture in Jerusalem post under which he said “I want to humanise Israel for Iranians and to tell them that Israel is not thirsty for blood of Muslims, as propaganda from the Islamic Republic says”.

Note: It is true that Hossein was in Israel, on two separate occasions. However after his second trip here, he suddenly changed his opinion and started becoming vehemently anti- Israel in his blog. He also became a strong supporter of President Ahmadinejad and condemned Akbar Ganji and Ramin Jahanbegloo for being “pro regime change”.

Hossein returned to Iran about three weeks ago. Prior to his return, he started attacking Ayatollah Rafsanjani in his blog. It is possible that he fell fowl of a power struggle within Iran.

One possibility that Israel will have to take into consideration is that the Russians may reverse engineer the UAVs. And who knows, maybe in a number of years, they will sell their own Israeli copied UAVs to Iran or Syria.

This sale also offers an opportunity. Israel wants to improve its bargaining position with Russia, because Moscow is an important player in the dispute surrounding Iran’s nuclear program. Furthermore, as a member of the Quartet, Russia is an important party in the Israeli – Palestinian peace talks, while its good relations with Damascus add to its influence in the negotiations between Israel and Syria. Last but not least, the recent dispute with Washington, and Russia’s stationing of missiles in Kaliningrad, have added more weight to Russia’s strategic standing.

The sale of UAVs will not be a game changer. But it will most probably provide the Israeli point of view with more sympathy and allies in Moscow, than before. This will be a welcomed change as Israel has until today had very little lobbying power in the Kremlin.

Mahmoud Ahmadinejad’s congratulatory letter to Barack Obama has increased the likelihood that the two sides will approach each other and start negotiations sometime in the future.

However, one must not overlook the fact that Ahmadinejad is not the strongest man in Iran. Khamenei is, and Obama should approach him, instead of Ahmadinejad or whoever may be the next president in Iran. This is because foreign and nuclear policy is made by the Supreme Leader, and not the president.

But what is the best way to ensure that Khamenei does take up on the offer?

“A bold and direct U.S. offer to Ayatollah Khamenei, such as proposing that a top U.S. official meet with him in his Tehran office, would put Khamenei in a difficult position. It is possible — although not likely — that he would accept, especially if he believes that Iran faces a direct threat from economic failure or Israeli attack, or if he thought that American officials would treat him respectfully and end U.S. pressures on his regime. But even if he refused to meet, the United States, having tried to solve the problem through diplomacy at the highest level, would most likely find it easier to reach consensus with its strategic allies to increase sanctions on Iran”.

Some in the past have accused WINEP of being a right wing conservative Think Tank. Even if thats half correct, this article shows that talking to Iran is now becoming a bipartisan decision. This is a welcome change in US foreign policy, the fruits of which can be enjoyed by the people of the US and the Middle East.

According to Iran Economist, Asghar Riyazati, the head of Tehran sewage system has declared that every year 4500 tons of nitrate enters Tehran’s sewage system. The nitrate then infiltrates water wells in the city where water is stored. The presence of nitrate at this level could cause cancer.

One of the most immediate problems noted by Riyazati is the lack of coordination and balance between construction of new water distribution systems and disposal of sewage.

What is even more surprising is that only 18% of Tehran is covered by the sewage network. (Its interesting to note that Israeli companies were involved in the design and construction of the Tehran sewage system in the 60s and 70s).

According to Riazati, without filtering, if the current situation continues, it would take 1100 years for the quality of water resources to return to their original caliber.

Noting the rise in pollution and deforestation in Iran, the environment is likely to become a more pressing issue during next year’s presidential elections in Iran.